Profile: Health Net Inc (HNT.N)
17 Dec 2013
Health Net, Inc., incorporated on June 7, 1990, is a managed care company that delivers managed health care services through health plans and government-sponsored managed care plans. The Company operates in three segments: Western Region Operations, Government Contracts and Divested Operations and Services. The Company provides and administer health benefits to approximately 5.4 million individuals through group, individual, Medicare, Medicaid, United States Department of Defense, including TRICARE, and Veterans Affairs programs. Through its subsidiaries, it also offers behavioral health, substance abuse and employee assistance programs, managed health care products related to prescription drugs, managed health care product coordination for multi-region employers and administrative services for medical groups and self-funded benefits programs. On April 1, 2012, the Company’s subsidiary Health Net Life Insurance Company sold its Medicare PDP business to CVS Caremark.
Western Region Operations Segment
The Company’s Western Region Operations segment includes the operations of its commercial, Medicare and Medicaid health plans, as well as the operations of its health and life insurance companies primarily in Arizona, California, Oregon and Washington, and certain operations of its behavioral health and pharmaceutical services subsidiaries in several states, including Arizona, California and Oregon. As of December 31, 2012, it had approximately 2.6 million risk members in the Company’s Western Region Operations segment. The Company offers a spectrum of managed health care products and services. The pricing of its products is designed to reflect the varying costs of health care based on the benefit alternatives in its products. The Company’s health plans offer members coverage for a range of health care services, including ambulatory and outpatient physician care, hospital care, pharmacy services, behavioral health and ancillary diagnostic and therapeutic services. The Company’s health plans include a matrix package, which allows employers and members to select their desired coverage from a variety of alternatives. The Company’s principal commercial health care products include HMO Plans, PPO Plans and POS Plans.
The Company’s health maintenance organization (HMO) plans offers benefits generally for a fixed fee or premium that does not vary with the extent or frequency of medical services actually received by the member. The Company offer HMO plans with differing benefit designs and varying levels of co-payments at different premium rates. These plans are offered generally through contracts with participating network physicians, hospitals and other providers. The Company’s preferred provider organization or PPO plans offer coverage for services received from any health care provider, with benefits generally paid at a higher level when care is received from a participating network provider. The Company’s point of service or POS plans blends the characteristics of HMO, PPO and indemnity plans. The Company’s Arizona health plan operations are conducted by its subsidiaries, Health Net of Arizona, Inc. and Health Net Life Insurance Company (HNL).
The Company provides a range of Medicare products, including Medicare Advantage plans with and without prescription drug coverage and Medicare supplement products that supplement traditional fee-for-service Medicare coverage. The Company contract with CMS under the Medicare Advantage program to provide Medicare Advantage products directly to Medicare beneficiaries and through employer and union groups. The Company provides or arrange health care benefits for services normally covered by Medicare, plus a range of health care benefits for services not covered by traditional Medicare, usually in exchange for a fixed monthly premium per member from CMS that varies based on the geographic area in which the member resides, demographic factors of the member such as age, gender and institutionalized status, and the health status of the member.
The Company’s portfolio of Medicare Advantage plans focuses on simplicity so that members can use benefits with minimal paperwork and receive coverage that starts immediately upon enrollment. The Company also provides Medicare supplemental coverage to 25,861 members as of December 31, 2012 through either individual Medicare supplement policies or employer group sponsored coverage. The Company is a Medicaid HMOs in the United States based on membership. As of December 31, 2012, we had 1,084,322 members enrolled in Medi-Cal (California's Medicaid program) and other California state health programs. The Company offers insured PPO, exclusive provider organization (EPO) and indemnity products as stand-alone products and as part of multiple option products in various markets. These products are offered by its health and life insurance subsidiaries, which are licensed to sell insurance in 49 states and the District of Columbia. The Company offers pharmacy benefits, behavioral health, dental and vision products and services (occasionally through strategic relationships with third parties), as well as managed care products related to cost containment for hospitals, health plans and other entities as part of its Western Region Operations segment.
The Company provides pharmacy benefit management (PBM) services to Health Net members through our subsidiary, Health Net Pharmaceutical Services (HNPS). As of December 31, 2012, HNPS provided integrated PBM services to approximately 2.4 million Health Net members who have pharmacy benefits, including approximately 231,000 of its Medicare members. The Company administers and arrange for behavioral health benefits and services through its subsidiary, Managed Health Network, Inc., and its subsidiaries (MHN). MHN offers behavioral health, and substance abuse programs on an insured and self-funded basis to groups in various states, and these programs and services are included as a standard part of most of its commercial health plans.
Government Contracts Segment
The Company’s Government Contracts segment includes its government-sponsored managed care federal contract with the Department of Defense under the TRICARE program in the North Region and other health care, mental health and behavioral health government contracts. Under the T-3 contract for the TRICARE North Region, the Company provides various types of administrative services, including provider network management, referral management, medical management, disease management, enrollment, customer service, clinical support service, and claims processing. The Company’s Government Contracts segment also includes other health care, mental health and behavioral health government contracts that it administers for the Department of Defense, the United States Department of Veterans Affairs and certain other state and federal government entities.
The Company’s wholly owned subsidiary, Health Net Federal Services, LLC (HNFS), administers the T-3 contract with the Department of Defense under the TRICARE program in the North Region. Under the T-3 contract for the TRICARE North Region, it provides administrative services to approximately 2.9 million Military Health System (MHS) eligible beneficiaries. Under TRICARE Prime, enrollees pay an enrollment fee (which is zero for active duty participants and their dependents) and select a primary care physician from a designated provider panel. The primary care physicians are responsible for making referrals to specialists and hospitals.
Divested Operations and Services Segment
The Company’s Divested Operations and Services segment included the operations of its businesses that provided administrative services to UnitedHealth Group. The Company’s Divested Operations and Services segment, formerly called the Northeast Operations segment, also includes the transition-related services provided in connection with the sale of its Medicare PDP business, which was completed on April 1, 2012.
Health Net Inc
21650 Oxnard Street
WOODLAND HILLS CA 91367